Britain’s Business Secretary Kwasi Kwarteng is resisting pressure from gas companies to scrap the energy price cap and offer government bailouts to firms facing the prospect of going bust this winter.
He said it would not be fair to “throw taxpayers’ money” at businesses, many of whom he claimed were suffering due to poor leadership.
Speaking to Sky News this morning, he batted away reports warning that dozens of energy groups could collapse before the end of 2021.
He said the number of firms which would be likely to exit the market over the coming months “could be worse than” the annual loss of five to eight companies.
Yesterday Mr Kwarteng held crunch talks with the bosses of energy firms to find a solution to record gas costs.
Following the summit, a joint statement was issued by Mr Kwarteng and Ofgem chief executive Jonathan Brearley confirming they had taken a unified position over the price ceiling continuing, saying it must “remain in place”.
Speaking on Tuesday, Mr Kwarteng said he is abiding by three key principles when trying to tackle the crisis, following crunch talks with energy leaders yesterday.
His first priority is to ensure customers, particularly the elderly, have access to gas over the colder months. Secondly, he is standing firm on his stance against any bailouts for gas firms.
He told Sky News: “I don’t think we should be throwing taxpayers’ money at companies which have been - let’s face it - badly run.”
He added: “I don’t want to prop up failing companies, I don’t want there to be a reward for failure, I don’t think the taxpayer should be propping those up.”
And thirdly, he insisted the energy price cap is here to stay, which he said had “forced companies to innovate”.
On Monday night, Mr Kwarteng and Mr Brearley said: “Central to any next steps is our clear and agreed position that the energy price cap will remain in place.
Mr Kwarteng had earlier told MPs the cap saves 15 million households up to £100 a year, adding: “It’s not going anywhere.”
The Daily Telegraph reported that some companies present at the meeting – attended by the likes of Scottish Power, Octopus, E.ON and EDF – called for the cap to be scrapped amid fears more firms could collapse, with four having already gone bust.
Some analysts have reportedly predicted the number of UK energy companies could be drastically reduced over the coming months, leaving as few as 10 if the gas crisis continues.
The energy price cap, which follows a review in August, is already set to rise.